UPDATE 1-U.S. court allows appeals of Detroit bankruptcy eligibility

Feb 21 (Reuters) - A U.S. court on Friday said it will hear
direct appeals by seven groups of petitioners, including pension
plans for Detroit's police and firefighters, regarding the
city's eligibility for bankruptcy.

"Upon consideration of the petitions to appeal and the
responses thereto, a direct appeal to this court is warranted,"
the 6th U.S. Circuit Court of Appeals in Cincinnati said in an
order filed on Friday. It said it would not expedite the appeals
for the time being.

A federal bankruptcy judge in a landmark December ruling
said Detroit was eligible to pursue its bankruptcy case.
In his ruling, Judge Steven Rhodes said Detroit
met federal requirements for bankruptcy protection primarily
because it was insolvent and negotiations with its thousands of
creditors were not practical.

Rhodes subsequently allowed the pension funds, city labor
unions and retirees and other parties objecting to his ruling to
bypass U.S. District Court and seek a hearing before the federal
appeals court. However, he recommended that the appeals court
reject the appeals so his court could to continue to work on
resolving the city's massive financial problems.

The city was expected to file later on Friday a
court-ordered blueprint detailing how it will deal with some $18
billion in debt.

The appeals took issue with Rhodes' contention that city
pensions could be cut as part of the restructuring. They argued
that such a move is prohibited by the Michigan Constitution,
which protects public worker pensions from impairment.